depress the exchanges, and consequently to increase the drain on its coffers.

9. That the extensive failures of country banks, and of some of the London banking houses, and the general derangement of the circulation in the autumn of 1825, were clearly the consequence of their overtrading by issues of paper, and by advances on securities, either inadequate or not sufficiently convertible, in an undue proportion to the capitals possessed by them, and to the deposits in their hands.

10. That the empirical and hazardous, but successful, measure adopted by the Bank, at the close of 1825, of extending its circulation in the face of a run which had reduced its treasure to the lowest ebb, would not have been called for but to counteract the consequences of a previous great error in the regulation of the issues in the autumn of 1824 and the spring of 1825.

11. That the fall of prices of shares and commodities after the summer of 1825 was the effect of the cessation or abatement of the causes of the rise, in each particular instance, accelerated and aggravated by the state of discredit and the derangement of the circulation at the close of that year.

12. That the prices of provisions, as they had been little influenced by the spirit of speculation which raised the markets for other produce, and the shares in foreign loans and joint-stock companies, so they were little affected by the causes of reaction which operated on those other markets.

CHAPTER IX.

STATE OF PRICES AND OF THE CIRCULATION FROM THE COMMENCEMENT OF 1828 TO THE CLOSE OF 1832.

AFTER the violent changes that characterised the period which has recently passed under consideration, the trade and manufactures of the country had, in 1827, resumed their usual and steady course at the reduced prices to which the increased supplies and diminished cost of production had ineivtably led.

The corn trade, and the prices of provisions generally, were, in the last chapter, shown to have been distinctly under the combined influence of the seasons and the corn laws, and not to have participated in the great changes which the state of commerce and of credit underwent in the interval from 1823 to 1827.

In the period which is now to come under consideration, we shall have occasion to see, that while the prices of provisions underwent very considerable variations, but were for the most part at a relatively high range, the trade and manufactures of the country, although proceeding in progressive extension, were, for the most part, undisturbed by any great fluctuations, the general tendency being to a decline of prices from causes which will be separately examined.

The price of provisions will, according to the order hitherto observed, come first to be considered.

VOL. II.

SECTION 1.- Prices of Corn from 1828 to 1832.

We have seen that, at the close of 1827, the corn markets had fallen, although not to their lowest rate, yet to about the prices to which they had on several former occasions subsided, when not under the influence of deficiency or superabundance.

The winter of 1827-8 was open and mild, and the spring following, although occasionally cold and inclement, was not remarkably so. But there was a good deal of rain in June 1828, at the critical time of the blooming of the wheat, and the appearances of the crop were unpromising. Prices had accordingly experienced a slight improvement as the season advanced. About the second week in July, the rains set in heavily, and the weather continued thenceforward till the middle of August to be very wet and stormy. The crops in the home district, and in the great corn-growing counties, being rather forward, were exposed to great injury by the prevalence of such weather during the progress of the harvest, and were in consequence mostly carried in very bad condition. Independently, however, of the condition, the produce was found to be deficient; the wheat crop especially, the grain being coarse and shrivelled, and consequently light and unproductive: this description applied chiefly to the southern and eastern counties. As the weather had cleared up in the third week of August, and thenceforward continued fine, all the crops in the more northerly districts were secured in good order, although even in those the produce was considered to be below an average, and the quality indifferent. Upon the occurrence of the fine weather at the end of August, the markets receded rapidly; but when it was ascertained, upon the conclusion of the harvest, that the yield upon the whole was greatly deficient, the

markets resumed their tendency upwards, and the average price in November reached 75s. 3d. for wheat. The ports then became open at the lowest duty.*

This instance is a specimen among many others of the little direct influence of the circulation in counteracting the force of opinion on prices; for, as we shall have occasion to see, there was coincidently with this great rise of the price of corn, a reduction by the Bank of its issues.

The rise and high range of the prices of corn during this contracted state of the circulation, was not from the pressure of immediate scarcity, and consequent urgent demand for consumption, but the effect of opinion of eventual scarcity. The advance at that season of the year, namely, in the three months immediately following the harvest, which, after the middle of August was secured in perfectly dry condition, and a great part of the wheats, therefore, although inferior in quality, were fit for immediate use, necessarily involved more or less of speculation; thus proving that as soon as grounds existed for entertaining a favourable opinion of the future course of markets, the circulation, however contracted, did not prevent a great speculative rise. The speculation, however, went on the prospect of a greater rise, and a higher range of prices than were eventually realised. And the rise would have been greater, had it not been for circumstances which were subsequently developed.

1. The surplus of the old stock proved to be beyond what had been reckoned upon.

2. The crops, though decidedly defective, were rather less so than had been anticipated, those in the north having been well secured, and not so

But, as during the fall of the prices of corn in 1827, the prices of meat had ranged comparatively high, the advance of the prices of corn in the autumn of 1828 was accompanied by a fall in the prices of meat.

deficient in point of acreable produce as they had been in the south.

3. A great increase of the importation from Ireland, for instance :

1827

1828

Wheat. 307,646 qrs. 474,993

Flour. 341,630 cwt. 621,568

4. A large foreign importation, of which a considerable proportion came from a quarter that had not at all been looked to as a source of supply, namely, Spain, which in our former scarcities had been a competitor with us in purchasing corn in the north of Europe, and on some occasions requiring supplies from this country. No less than from 200,000 to 300,000 quarters were received from thence in the winter of 1828-9.

If it had not been for these unlooked for circumstances, but more especially if the harvest had proved as calamitous as that of 1816, and if the scarcity had extended, as it did in that year, to the whole of the Continent of Europe, the prices of 1829 would probably have reached at least the elevation of those of 1817. In the examination of Mr. David Hodgson before the Agricultural Committee of 1833, he is asked, "Do you not conceive that if any one of the years to which you allude, from the year 1828 to the present period, had been of a similar character to that of 1816, the deficiency which occurred during that period would have been felt with greater pressure in this country?" Answer, "I should think there cannot be a question of it."

But the supply, including the quantity of foreign admitted for home consumption, about 850,000 quarters of wheat, between the harvest of 1828, and that of 1829, having with the surplus from the former year proved to be more than sufficient at the advanced prices, the markets gave way as the harvest of 1829 approached.